Scottish and Southern Energy: we’ll go on without you

Scottish and Southern Energy has reaffirmed its intention to build the Viking windfarm regardless of whether the Shetland community continues as its partner.

The power company’s determination to proceed with the 103 giant turbines consented by the government suggests that the choice facing Shetland is not if it shall have a windfarm but whether or not it still wants to be part of it.

In a statement to The Shetland Times SSE said: “Throughout the development process we have always said that our preference would be to partner with the Shetland community but that if they chose not to be involved we would continue with plans to develop the windfarm.”

With some urgency Shetland Charitable Trust will have to decide whether to continue to invest to reap rewards later of potentially £20 million a year or sell up its 45 per cent share for £58.5 million now and peanuts thereafter.

The trouble is the trust is riven with doubt about its involvement in Viking and is currently incapable of discussing it because too few trustees are both available and agreeable to doing windfarm business.

Its problems over Viking came to a head again on Monday when it met to sanction a £6.3 million payment required as its contribution to the £14 million to be spent by the partners getting the project ready for the final decision in less than two years time.

The charity’s chairman Bill Manson, who also chairs Viking Energy, said the failure to approve the funds left the local half of the partnership, comprising the trust and the Burradale windfarm owners, in a situation which was “pretty parlous” and “very difficult if not close to crisis”.

Monday’s aborted meeting was the second failed attempt, the previous one being scuppered the day before the meeting on 29th March when it was realised that too many trustees were out of Shetland.

A third attempt is being made to organise a last-gasp trust meeting for next week – but once again it seems too many trustees will be out of Shetland or just unavailable, due largely to the council elections and those winding down from councillor life.

The next scheduled meeting is not until 24th May but with at least 11 new councillors taking their seats as trustees for the first time that day following the elections they will need a period to get up to speed on Viking and their responsibilities as trustees and investors before contemplating multi-million pound history-shaping deals. So that would suggest June or July at the earliest – if the trust’s partners in the venture can hold on that long.

Mr Manson said: “We have got serious difficulties as a company but the project is not being hindered. It is ploughing on.”

With the long-awaited planning consent having been granted on Wednesday 4th April the partners are keen to make progress. New work is already getting under way, believed to include monitoring of the bird breeding season, and with the trust having no money to put towards future bills the directors might have to cease trading and have the company wound up.

Mr Manson said: “There is no way the project has even paused. It is just that Viking Energy Limited’s ability to participate, other than talking about things, is now severely shackled. We are literally, from now on, living on the goodwill of our partners.

“We are currently the unreliable partner. Can the Shetland public imagine what the reception would be if one of our partners was expecting us to carry them for a spell with no knowledge of whether they were going to come up with money or when? There would be outrage.”

It has been suggested that perhaps the trust should consider an instalment instead of the full commitment to £6.3 million. But Mr Manson said that presented difficulties because of the cost of contracts being entered into in the near future.

About half the £14 million spend on bringing the project to the final decision stage would be on detailed site investigations in the hills of the central Mainland. The rest is for investment auditing, technical and construction studies, wages and other costs of running the business.

Given the unseemly problems that Viking has visited on the trust it has been suggested that Shetland Islands Council might even wish to buy back its project after selling it to the trust five years ago.

The unexpected problem of securing funding from the trust will be high on the agenda for a meeting of all the Viking partners next week. SSE appeared relaxed about the trust’s constipation this week. It said: “We are not concerned by the discussions that are taking place and it is only to be expected when dealing with an investment decision of this scale.”

The company declined to comment further on the dispute within the trust which it said was a matter for the trust.

The other partner, Viking Wind, made up of the four local owners of the Burradale windfarm, is considering its position before commenting.

Mr Manson said he would be “astonished” if both the trust’s partners did not have concerns about its funding crisis. He felt “frustrated” and “deeply concerned”, blaming some trustees for losing their nerve.

“I think they are not serving the trust and they are being influenced by a pressure group. I am more satisfied than I have been in the past that although the noise is coming from one quarter actually the support is greater than the opposition.”

He believed even some Sustainable Shetland supporters would be very concerned that the project was going ahead with possibly greatly reduced local content. “I think whether you support or are against the windfarm, one of the worst scenarios that people can imagine is that the thing just goes ahead – which it is doing – but without any major local community involvement. He who pays the piper calls the tune and reaps the profit.”

That scenario has been punted before and dismissed as scaremongering. But Mr Manson insisted: “I don’t know how I can say it any more plainly: it is going ahead. It has partners who are not constrained by their funding. Both these [SSE and VW] are people who operate windfarms. They know what they’ve got to do. They are not breaking particularly new ground for them. They’re just getting on with the business they are in.”

In theory at least Viking Wind holds sway at this stage despite having only a five per cent share in the project overall. The agreement between the trust and VW is secret but it is understood that either partner can step in and take over if the other fails to provide the required funds, also gradually gaining an unknown percentage of the other’s shares. Ironically, the deal was written with a view to the funding problem perhaps befalling Viking Wind rather than the £220 million trust.

The £3.4 million spent by the trust on Viking so far was to get the project to the consent stage, which it has done. Now, into a new financial year, there is only enough cash left to keep the operation ticking over for a short while, paying the staff at the Gutters’ Hut their wages.

The trust cannot pay anything towards the major programme of works to be done between now and early 2014 when a final decision has to be made about going ahead or selling out the trust’s share.

If the bills rack up the trust could find itself having to ask Viking Wind and/or SSE not only to subsidise it but not to punish it for being what Mr Manson called “a flaky partner” by taking away some of its shares.

He said: “Any partner in this venture is entitled to say: ‘We’re entering into commitments here and we now have no knowledge of whether you are going to live up to your share of it. That could be raised at a fairly early stage if there are big commitments to be entered into.”

Ultimately, the others could press on without the trust and without the trustees even having to formally decide what to do.

Despite the sense of frustration and possibly a little panic in the ranks at the charitable trust, others are doubtful about the real need to rush. However, there are a number of reasons for a degree of urgency in making progress over the next 18-24 months. These include:

* making best use of the summer to start the multi-million pound detailed ground investigations in the hills;

* the connection agreement with National Grid means an interconnector cable and transmission network should be ready for April 2016, when turbines are expected to be turning;

* the government subsidy regime is set to change in April 2017 for new windfarms which could see a further reduction in the value of renewable obligation certificates (Rocs) for generating power from onshore wind for the last 20 years of the scheme, due to end in 2037;

* Viking will have to join the queue for turbine delivery. It still has to decide which make and power rating of turbine to go for, which is expected to happen sometime around the end of the year.

There are also construction contracts, power purchase agreements, supply contracts and the crucial issue of raising the £556 million funding.

About John Robertson

33 comments

Colin Hunter

April 19th, 2012 20:10

I was utterly appalled when I heard that members of Sustainable Shetland had managed to have the charitable trust meeting dissolved. With the permission for the project to proceed having been given by Holyrood, the project will now go ahead whether the Shetland people (in the form of Viking Energy) are on board or not. It is, in my opinion a short-sighted and spectacular “own goal” which may now ensure that most of the profits exit Shetland out the “Sooth Mooth” as has so much gone before! My fondest wish is that some of the clowns who opened this hornets nest would have the common decency to do the same!

If the partnership is 50/50 as claimed, how can one part proceed without the other? I had understood that the partnership could only proceed by unanimous agreement. Does the new company structure and partnership recently ratified by Trustees change these rules? If this is the case have they agreed to a contract which allows SSE to strong arm the Charitable Trust into what SSE wants? The argument of dilution of control is, I think, spurious. The partnership has 50/50 voting, no shares. One part, we have been told, cannot out-vote the other. Or has this changed? If agreements and contracts have been so poorly constructed at this early stage, pity help us all, Viking Energy supporters and opponents alike.

In answer to Colin, Sustainable Shetland had nothing whatsoever to do with the fiasco at the SCT. Viking Energy had so loaded the Trust with its own people that due to the multiple conflicts of interests of the Viking director councillor Trustees, they could not stay in the meeting to vote. The meeting lacked a quorum, a simple legal requirement, so the meeting was abandoned with no vote. That was very ironic and a well deserved defeat for Viking Energy. You can only twist and pervert normal democratic behaviour so far. A bit too clever for their own good or maybe just so very, very stupid. Colin, Look to those VE director councillor trustees if wish to apportion blame, if they had shown more equitable behaviour and not tried load the odds the result may have been different. They simply got found out and had to withdraw, what a pity that did not happen earlier, it would have saved the trust £millions. For your information, not only Rosa noticed the meeting had no quorum; the press had also noticed and were going to declare the meeting inquorate. Strange that the employees of the SCT were unable to count to 12, very odd!

In reply to Ian, that merely serves to strengthen the case to have control of SCT devolved fully from the Council with it’s own, independently elected trustees. Not mainly Councillors as is now the case. It would also be good to think that such candidates would also be free from the shackles of “conflicts of interest” in any form. However, that is probably un-realistic as people of the required calibre will probably already be successful businessmen (persons) in their own right. It was my understanding that one councillor with no interest in VE also left the meeting, doubtless prompted to do so by the lobbyists. Eleven plus one = twelve! It is high time that SS accepted that the project has been approved at the highest level, and all they can now achieve is to wreck any possible monetary benefit to Shetland, and especially to those most affected by it.

^ And lots of people do not back it. This will NOT provide loads of jobs; 140 over 5 years and 34 after construction is not really very many given the financial risks.

SSE must be laughing all the way to the bank. As for financial rewards, they have to compensate a community anyway. Regardless of that, we are one of the richest, if not the richest, Local Authority in the UK. Just think how the SCT could invest in standard funds/shares without putting them at risk/selling them in order to fund Viking. I’m sure they could employ at least 34 people elsewhere for a lesser figure!

The sheer greed demonstrated by some is outrageous. As I’ve read elsewhere, just how many community halls can you do up? The arguments put forward about combating fuel poverty do not hold up. Many people live in social housing that cannot benefit any further from more insulation and in any event, such schemes are already funded by the Government/EU. You cannot change the price of electricity as that is regulated so I’d be interested to hear precisely how fuel poverty would be alleviated by having VE.

If it is going to go ahead regardless, then please, let Shetland make all the money they can from it, sod the Scots et al. I dont agree with the wind farm but I cant see why we should lose out, its not just those that live 2 km from the masts that will be disturbed, you all will, everytime you look North!

It does seem to me that there is a number of people who have been blinded by the £££ signs and ultimately believe that any destruction/disruption to Shetland will be worth it. Since we appear to have reached the point of no return I genuinely hope that this turns out to be the case because despite what people have been led to believe by VE this is a complete gamble with no guarantees as of yet. As someone who has been largely skepical of this project since the sheer scale of it came to light it is unhelpful at this stage to have people suggesting that I should get behind it. That is a bit like asking me to get behind the devil because he’s going to take my soul anyway.

Of course SSE will proceed without any community involvement – They have what they need now, the idea of community involvement was only valuable to get it to, and through the planning stages – now thats achieved job done – they care not on jot what the people of shetland say or want they will steamroller on in the search for profit at the expense of our environment.

Whether you are for the windfarm or against it, make no mistake your involvement is no longer required, it will happen , they will make profit (along with one or two individuals) and we will be left to pick up the pieceswhen it ends …………..

Brian Smith says my response was not a sensible one to John Robertson`s article : I will respect his opinion but I hope readers will distinguish between his rally to move on and other suggestions that we should put it all behind us and paper over the cracks .

Kathy. Please tell me why I would want to leave the place I was born and raised just because of a windy speil or two? (or 100 for that matter!) I actually see nothing particularly appealing about the Lang Kames anyway, and never have. Probably interminable hours spent sitting on Bedford OB buses slowly grinding their way north (or south) along winding single track roads removed any romantic notion of beauty! I remember thinking many times that it would never end and wished that there was something interesting to look at! It would now appear that my childhood prayers have at last been answered!

If SSE wants to go ahead on their own, so be it, just let them try. However do not risk Trust funds on this speculative Wind Farm venture. After the judicial review and public enquiry is concluded, a couple of years hence. Then only if ROC subsidiaries are still available, if the interconnector is financed and built, if Scotland is still connected to the UK grid, if Shetland is still part of a maybe independent Scotland, then bring on SSE. Sixty plus turbines within 2K of residencies. Sixty plus legal actions with appeals going on for years, all the way to the Supreme Court and beyond into Europe. Good luck SSE I will be waiting for you with about 3000 plus others at a conservative estimate, I hope you have bomb proof investors and bankers… Ian Tinkler Shetland West http://www.iantinkler.com/

Ian Tinkler..With all due respect, its doubtful that the SCT would have faltered if not been faced with the barrage from Sustainable Shetland. Anyone who raises their head above the parapet to say that the windfarm might just be a good thing for Shetland gets it in the neck. And now thanks to Sustainable Shetland we can possibly kiss the long term benefits to these islands goodbye. And apart from Sustainable Shetland who is driving the anti wind campaigns in the UK and worldwide? Its sad that otherwise sensible people are buying into a crock of nonsense about wind and climate that owes its existence to well structured campaigns of misinformation by some of the nastiest right wing corporate enterprises in the world – fuelled by the right wing media antipathy to wind in UK because the county set don’t like it. It’s no coincidence that the ‘home counties’ set, from Princes Phillip and Charles down to the rural dining set, hate wind- often on “environmental grounds” – “spoils the view darhling” – it’s all a left wing plot! The arguments about the cost of backup, and about the cost of subsidy are fake – produced by astroturfing groups and by right wing think tanks who have been instrumental in giving the Tories there reinvigorated status and as drivers of ultra right neo-con policy. They are tactics that are well developed by the right in the USA – feeding the media with negative story lines ostensibly from “independent” bodies that allow their allied politicians to react as if they were responding to legitimate public concerns. The Truth About Denial – Sharon Begleyhttp://www.sharonlbegley.com

It is good to hear from Susan Bowie that she believes without Sustainable Shetlands barrage of protest that the Shetland Charitable Trust would have happily acquiesced to permitting Viking energy to acquire more funds. No matter that the meeting had no quorum. No matter that Trustees had conflicts of interest and to continue in the meeting would be grossly without ethic and probably illegal. Do you have such a view, Susan, that such grossly morally abhorrent practises are OK as long as VE gets its £12million? If so, what an ambassador for the Viking Energy project you truly are. You absolutely make my point for me. I personally know and greatly respect some, only some, of the Trustees and executives of the Trust. If you feel Sustainable Shetland protesters could change their ethics and behaviour you are insulting them. Unlike some they have high ethics and are not amorally repugnant.

Thanks to Colin Hunter at least someone appears to be thinking clearly.

Of course few really want windmills, oil terminals or nuclear power stations or for that matter any large industrial complex on their door. But we all want electricity and the other benefits industry brings. As I look around me just about everything I see is either a direct or by product of the oil industry or has been processed using huge amount of energy.

There are of course those who have genuinely held concerns about the Viking Energy project but I have to say the language of rhetoric, accusation and personal attack on those who equally think this project is good for Shetland is un warranted. In particular the attacks on councillors who at least had the courage to stand for council and whom in the main will profit little by their support for VE and probably disappear into relative obscurity. I am sure most of those who support VE did so believing they were ensuring a better future for Shetlands economy and thus support for the range of excellent services we all enjoy.

The debate on whether or not the wind farm is coming is largely over. Yes the lengthy protest has probably won some worthwhile concessions from VE, but now it’s time to move on and work together to ensure the maximum benefit for our community.

So Dennis Leask, you’re happy with a company that states it has got permission and gone through all the licensing hoops for an interconnector and got approval from OFGEM for it when it hasnt’? You’d also be happy, no doubt, with the fact that at least one other SSE windfarm (Clyde) on nothing like the terrain of Shetland also cost £600 million? You’re also no doubt happy that SSE have recently been granted funding for an extremely small scale interconnector (No doubt before a larger one) between Norway and Scotland? So, if you were a shareholder in SSE, would you take advantage of such subsidies which obviously assist in getting more interconnectors built and then where would you buy your power from: Shetland with higher maintenance costs and less output or Norwegian hydro establishments? Do you honestly think VE windfarm (IF built) will be up and running in such circumstances in 25 years time because I don’t? Oh, and I suppose you also think it is okay for Councillors to ignore the SIC Planning Department’s 69 page report?

Who is leading the fight against windfarms elsewhere in the UK? Well, Cameron recently spoke out about them and it wouldn’t do you any harm to remember that OFGEM is primarily based in England; no doubt one word from him and it would be no to an interconnector for Shetland. Where precisely, in writing, is confirmation from OFGEM that a license will be granted and where, in writing, is it from the National Grid that Shetland will be part of it? NEITHER APPLY – SSE and VE haven’t got it. Indeed, Manson fudged the issue on the Radio Shetland programme, quite simply because they have NOT got the license. So, if they don’t get the license and the permission to build the interconnector, are you in favour of the windfarm then?

Well said Dennis. The UK is seriously struggling to redevelop and secure its electricity supply in the coming 12 years. By the end of 2015 a third of Britain’s coal generation fleet will close. By 2023, all but one of Britain’s nuclear power stations will be closed. The last remaining company in the running to build a new generation of nuclear power stations (Centrica) is on the brink of pulling out due to a lack of agreement over future electricity prices. Renewable energy is going to play an increasing part in the UK’s electricity supply in the medium term. The SCT should continue their investment in VE.

David Attenborough is in favour of wind farms, I believe he said they were as beautiful as the concord. I’m sure if this wind farm was being built in yell and unst the west mainlanders wouldn’t be shouting half as loud. It’s one of those “not on my doorstep” issues.

Thank you S V Jolly for your reply, you seem to have lots of political issues and corporate conspiracies theories rattling around in your attempt to set me straight. Never mind I guess we will just have to agree to disagree.

The Clyde Wind Farm web site actually says £500m for 152 turbines against 103 turbines in Shetland. Of course they are bigger and the terrain is different so let’s take the figure of 600m with the council 50% share at £300m, against an estimated return of £930m plus other community payments. Not a bad return but I guess we are being all a bit simplistic in throwing such figures around.

Regarding the planning departments 69 page report, I have had a life time of dealing with their reports. In my humble opinion they are probably the greatest brake on Shetland and the UK economy, with a track record of negativity towards just about all development.

Of course there will always be the risk of alternate energy sources and for me probably the growth in gas extraction from shale poses the greatest risk to less economical renewables. But successive governments have committed to a policy of greater reliance on renewables and energy security, which for the foreseeable is what we must work with. In 2025 the world will probably be a very different place and we may both be wrong, but to sit on our hands and do nothing is really not good enough.

Ah but Dennis, did you not read the PDF document also on the Clyde windfarm website? Within that, it stated £600 million – so which figure is correct? Corporate conspiracies? Having worked in the City of London, it is common for companies to want the best deal for their shareholders and given that it is no secret that SSE have been in talks with Norwegian companies, I fail to see how that can be a corporate conspiracy when indeed, it is, in fact, a reality – or do you not read Reuters’ newsfeeds?

I very much thank you for that Sandy, “David Attenborough is in favor of wind farms, I believe he said they were as beautiful as the concord”. A bit of a sad analogy, however very appropriate. Concord rather horrifically crashed and burnt. It was regarded as an environmental nightmare causing upper atmospheric considerable damage never to be rivaled by any other commercial aircraft. It was also the worst commercial failure in joint U K and French aviation history. I sure that was not the point you intended to make, but it certainly fits the bill! Incidentally the Viking turbines are larger than Jumbo jets. David Attenborough has never has endorsed the Viking project nor would he endorse any project which endangered threatened species as Viking does… Ian Tinkler West Shetland http://www.iantinkler.com/

I see you’re still taking things out of context and twisting them to suit your own ends Ian. You are correct that Concorde did crash, once only in it’s illustrious career. The cause of that misfortune was laid at the door of some part or other which had dropped off an American aircraft, causing damage to a tyre which then disintegrated, resulting in a fuel tank being breached, and as they say, the rest is history. Up until that point, it was probably the safest commercial aircraft on the planet, and certainly the most iconic. How many Boeing and Airbus aircraft have crashed? And yet people still travel on them. One of the reasons for its lack of commercial success was probably due to the fact that there was a similar nimbyist movement to SS in the USA who wanted it banned because of noise, sonic booms, and pollution. Ironic then that, even at Mach 2, it was probably more fuel efficient in terms of MPG per passenger than the average American car of the day at 30MPH! I put it to you that Concorde was no worse than any other military aircraft of similar performance of that time and was seen as the Jewel in the Crown of Anglo French technological achievement for many years, in much the same way that forward thinking people regard wind turbines.

Colin, most of what you say about Concord is absolutely true. I was fabulous engineering and a magnificent aircraft. Way ahead of its time. Unfortunately it had more to do with prestige and national kudos than commercial aviation. Reminds me a bit of Mareel, not Viking Energy. Concord was elegant and beautiful, certainly not a Jumbo sized Windmill! Ian Tinkler West Shetland http://www.iantinkler.com/

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